Employees were not allowed to move their 401K holdings from Enron stock to something else from Oct 2001 until the end. The reason was that Enron was changing the company who administered their 401K and there needed to be a lockdown period when that transition took place. It was a serious stroke of bad luck that the transition started when the fit hit the shan. I worked with some of the people involved in that transition. They were not the type of people who would (or could) orchestrate a plan to screw employees.

Secondly… There was a level of loyalty among Enron employees unlike anywhere I have ever worked (I was a contractor). People thought of Ken Lay as a “grandpa” and some referred to Enron as “Mother Enron”. It was weird, but a lot of people that I knew had been with the company since the beginning. a few of the people I knew had large portions of their investments tied up in Enron stock because they had purchased it early on when Enron was a blip in the market and the stock was cheap. They made a lot of money over a ten year investment, but they got screwed in the end because the company was not honest with them (or anyone else). I know more than a few smart people who thought they were being loyal and who lost nearly everything because of that loyalty. It was heartbreaking ot watch. I think people forget how quickly the whole thing fell apart. The stock went from 90-something a share to pennies in a matter of months. It was a surreal thing to witness.

But the culture doesn’t support financial rectitude. The public sector leads the way of course.

In the UK, for example, the Taxpayers’ Alliance reported that nearly 20% of public spending in 2004 was wasted (£81bn). The effectiveness of watchdogs, who are appointed to act on the public’s behalf, seems a crucial matter for debate. Unfortunately, it may be too late for Arthur Andersen.

As for the wasted money in the European Union, the director-general of Internal Audit there was warned: “We have ways of breaking people like you”.

Under some pressure last year, the UK government issued a consultation document to try to change the loose culture among public servants. This document, the draft Civil Service Bill, may come to nought; but significantly it is the first time in 150 years that such a legislative step to control public spending was thought necessary. Things must be bad.

Because it’s something people can grasp, in a very direct and personal way, where they tried to follow the entrepreneurial prescriptions of hard work, positive thinking, and savings and investment, only to be defrauded by corporate executives. That’s very resonant in a way that an abstract structural critique is not.

Regarding the “horrible, foolish decision” of not diversifying, what’s being missed there is the aspect that there’s a feeling that investing strongly in the company is a virtuous practice. From a financial aspect this is of course utter nonsense, but there’s an emotional aspect that’s missed as to why that bad decision is being made.

(Now there’s a tale that Private Eye has told: the story of how Lord Wakeham went from being Tory energy minister to Enron UK exec.)

From http://www.wsws.org/articles/2002/jan2002/enro-j14.shtml:
“The stock lockdown began the day after Enron’s release of a $618 million third-quarter loss that sent the stock into a tailspin. On October 10 Enron stock was selling for $35 a share, on October 26 it had fallen to $15 and by November 20 it had fallen to $7. By the end of November Enron stock was selling for under 50 cents a share.”

All during this time, the management of Enron was free to sell their stocks. And yeah, I think the bastards haven’t been prosecuted enough, yeah, it’s a problem with the current regulatory scheme there is in the US, but still, the rank and file employees got shafted.

You should see William Karel’s OPERATION LUNE

I’ve had a hard time understanding the resonance of the Enron story for lefties (an’ I’m one). Like this quote from the linked Onion review:

robbing tens of thousands of rank-and-file employees of their jobs and retirement savings.

So, yeah, people lost their jobs. If there hadn’t been fraud would they still be employed? Or, would they even have been hired in the first place, if not for the growth and profitability (fraudulent, of course) of the company?

We have provisions for laid-off employees in the US (and voters apparently don’t want more), what’s different about Enron jobs from those lost to incompetent management, or trade dynamics, etc.? Is it a different category of “wronged”?

Investors in Enron stock have a beef, as the company’s position was misrepresented, but the employees?

And the stock options: the execs got to sell right before the stock tanked because their employment contracts allowed it. The rank and file were not allowed to sell because their contracts didn’t allow it. Correct me if I’m wrong, but isn’t that a standard feature of many employment contracts – a waiting period before the ability to exercise the options?

So are people upset that the rich and powerful get superior compensation packages to the working stiffs? (And if execs weren’t allowed preferential stock option contracts, wouldn’t they just demand more straight pay?)

If Enron execs did something illegal, we prosecute them. But if people have a problem with greed and pushing the law to its limits, isn’t their problem more with capitalism in general? And if so, aren’t there a million more substantive complaints of the rich and powerful getting preferential treatment in the US economy before you get down to the problem of Enron employees not getting to sell their stocks in time?

http://www.austinchronicle.com/issues/dispatch/2002-05-17/pols_capitol.html